LePage’s budget tests local-state pacts, trust

Members of the Legislature study budget documents provided by Gov. Paul LePage's administration on Friday, Jan. 11, 2013, during the unveiling of LePage's $6.3 billion biennial budget in Augusta.

January 16, 2013 3:12 pmUpdated: January 16, 2013 3:12 pm

Already a common and valid criticism of Gov. Paul LePage’s proposed biennial budget is that it would shift costs onto municipalities. Revoking state-municipal revenue sharing, flat-funding education at curtailment levels, reducing payments toward teachers’ pensions and capping the state’s contribution toward general assistance, for instance, would likely cause towns and cities to both bludgeon their local budgets and increase their already-too-high property taxes.

In doing so, the proposed two-year $6.3 billion state budget would, in effect, lead municipalities toward a significant unfunded mandate. The budget might not meet the technical definition of an unfunded mandate — which is when a government requires an entity to fulfill a newrequirement without paying for it — but the idea is the same. Towns and cities must perform certain functions, but are being provided with less and less money to do the work. More than the monetary shock is damage done to trust.

Rules about what towns and cities must provide their residents — educational opportunities, clean water, road maintenance, land-use planning, elections, tax assessing, building inspections — haven’t changed. But the funding to meet those obligations is projected to only decrease — a minimum of $98.9 million each in fiscal years 2014 and 2015 from revenue-sharing losses alone. Maine residents are and should be concerned about the consequences of the proposed cuts.

What’s more, they should be worried about the administration’s apparent abdication of responsibility as its proposals would weaken agreements already set in law. Clearly some cost cutting is in order. But proposing to acquire some of the largest lump sums needed for the state by drawing from the towns is akin to balancing your checkbook by taking money from someone else.

In an analysis sent to municipal officers, Geoff Herman, director of state and federal relations for the Maine Municipal Association, said the proposed biennial and supplemental budgets would “either completely break or seriously violate nearly every significant financial agreement that has been struck over the last 80-plus years between state and local government as currently codified in statute.”

Those agreements include the motor vehicle excise tax system established in 1929, the municipal revenue sharing system established in 1972, the Circuit Breaker property-tax relief program established in 1987, the property owners’ Homestead Exemption established in 1998, the 55-percent education funding directive established by voters in 2004 and the business equipment tax exemption system established in 2008.

The state is, essentially, not just dealing with cuts to funds but to people’s confidence. Wanting to depart from such long-standing agreements with towns, and proposing to pull property-tax relief programs on which hundreds of thousands of Mainers rely, raises more questions than those based on dollars and cents. Where is the integrity?

Not only does the budget, as proposed, renege on agreements that municipalities have been counting on for years, it moves further away from the request made by voters in 2004 that the state fund 55 percent of the costs of public education. It currently funds about 45 percent. Getting to 55 percent was not going to be easy, and it was not going to happen quickly, but it appears as if the state has simply ignored the command. Not only is the state apparently failing to live up to its promises to local officials, it’s failing to work toward goals outlined by Maine voters.

Clearly the state has enormous fiscal challenges, and we expect a final budget agreement to have some cuts to programs. But the state should continue to look inward — to the services it provides and the tax code it sets — before turning to municipalities for their money and their faith.